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Health insurance schemes are leaving the poor behind

In the name of Universal Health Coverage, some donors and governments are promoting health insurance schemes that leave the poor behind. Here, Anna Marriott calls instead for tax reform to finance universal and equitable health care for all, rather than unworkable insurance schemes.

In a new report published today, Oxfam is warning that health insurance schemes introduced in the name of universal health coverage (UHC) are excluding the majority of people and leaving the poor behind.

While the new growing momentum for UHC is welcome there is a concern that the mistakes of history could be repeated. The optimism in 1978 following the Alma Ata 'Health for All' declaration was quickly replaced by disillusionment as influential donors failed to act on the shared vision of comprehensive universal primary health care. They financed low cost selective interventions instead. Today, a similar danger exists as we witness a wide range of 'business as usual' interventions being rebranded as
'UHC' despite them bearing little resemblance to the World Health Organisation's UHC principles.

This is certainly the case for health financing. Our new report takes a critical look at the almost exclusive focus of some donors and low and middle income countries on contributory insurance schemes as the way to achieve UHC. Such schemes fail to provide coverage for the majority of citizens and serve to divert attention away from needed reforms to national and international tax systems that could raise significant additional
revenues for health.

Voluntary insurance - private and community-based - has never worked to achieve UHC yet is still being widely promoted. India's voluntary RSBY (Rashtriya Swasthya Bima Yojana) insurance scheme for people below the poverty line is widely praised as a success but offers limited financial protection and has skewed public resources to curative rather than preventative care.

For those who recognise the pitfalls of voluntary schemes, social health insurance (SHI) has emerged as the model of choice. SHI has worked to achieve UHC in a number of high-income countries, but attempts to replicate in poorer countries have proved unsuccessful. In practice SHI schemes usually start with the small number of easy-to-reach formally employed and then struggle to scale up beyond. Premiums are too expensive for most and schemes become de facto voluntary, leading to large scale exclusion.

Kenya's National Hospital Insurance Fund - established nearly 50 years ago - today insures just 18 per cent of Kenyans.

Ten year old national insurance schemes in Tanzania and Ghana cover only 17% and 36% of citizens respectively. Kenya's National Hospital Insurance Fund - established nearly 50 years ago - today insures just 18 per cent of Kenyans.

Hopes that insurance contributions from those outside of formal employment would raise significant additional revenue have also not been realised. In Ghana, premiums paid by the informal sector contribute just five per cent towards the cost of the national scheme. Governments also face huge bills to cover the SHI contributions of their workers. The Government of Tanzania spent $33m on employer contributions in 2009/10; this equated to $83 per employee - six times more than it spent per person, per year on health for the general population.

Instead of importing inappropriate health financing models from high-income countries, our paper recommends that developing country governments look to learn from the increasing number of home-grown UHC success stories in other, more comparable countries.

The countries making most progress towards UHC agree that entitlement to health care should be based on citizenship and/or residency (not employment status or financial contribution) and while specific journeys differ, these countries fall into two broad camps. First there are examples of countries at all income levels, including Sri Lanka, Malaysia, and Brazil, which use tax revenues to fund UHC.

A second option increasingly being adopted by another set of successful UHC countries, including Thailand, Mexico, and Kyrgyzstan, is to collect insurance premiums only from those in formal salaried employment, and to pool these where possible with tax revenues to finance health coverage for the entire population. According to WHO, only eight of 49 low-income countries will be in a position to fully finance UHC from domestic resources in 2015 so international aid will continue to play a crucial role.

...governments and donors should look to reform national and international tax systems in order to generate significant and urgently needed revenue for health.

Crucially, the focus on health insurance has served as a distraction for the international health community from the key ingredient for all UHC success stories - public financing. Rather than focus efforts on collecting contributions from people who are too poor to pay, governments and donors should look to reform national and international tax systems in order to generate significant and urgently needed revenue for health. Oxfam estimates that strengthening tax administration alone could raise an additional 31 per cent of tax revenue across 52 developing countries amounting to $269bn
in increased domestic resources. Enough to double health budgets in these countries.

The growing momentum for UHC is welcome, exciting, and challenging. However if we are to heed World Bank President Jim Kim's warning that UHC could easily become a 'toothless slogan' then UHC advocates must stand true to the WHO UHC principles to reduce out-of-pocket payments, introduce mandatory pre-payment, create large risk pools and scale up public financing to cover those who cannot afford to contribute.

To these we add that entitlement to health coverage should be based on citizenship and/or residence rather than employment status or whether you have paid to join an insurance scheme; and that progress can only be considered progress if women and men living in poverty benefit at least as much as the better off at every step of the way towards UHC.